Partner Stewart Albertson discusses the concept of undue influence in overturning a California Trust or Will. You can read our other posts (and see our other videos) on undue influence here.
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Keith Davidson discusses how to amend your California Trust.
For our email subscribers: click on the title link to view this video on our website.
Stewart Albertson de-mystifies California No-Contest clauses.
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In our first Tools of War post we set out three general categories of information you need to know to be successful in trust and will litigation. They were:
Civil procedure and civil discovery we have discussed. Now let’s tackle evidence.
The rules of evidence apply in probate Court the same as in any other civil trial. And a majority of judges hearing probate cases will enforce the rules of evidence, although some are more strict than others.
Evidence rules are meant to limit the information that comes before the trier of fact (either Judge or Jury). The Judge or jury is only allowed to consider information that is “accepted” into evidence once it passes through the gauntlet of rules set down in the Evidence Code.
You can’t just walk into Court with a box of documents and a slew of witnesses and expect all that information will be accepted into evidence. The primary purpose of the evidence rules is to ensure the information presented is genuine (nothing made up by a party).
To navigate the rules of evidence you need to know 3 broad concepts: (1) Foundation, (2) Hearsay, and (3) Relevance. If you know these three concepts, then you have most of what you need to understand the rules of evidence.
Foundation, when referring to documents, just means “authentic”—all documents brought into Court must be authentic. You have the burden of proving your documents are authentic before the Court will admit them into evidence. Further, all witnesses must have personal knowledge of the facts on which they will testify, but that’s much easier to determine (either they do or they don’t). So let’s focus on foundation for documents.
Documents can be authenticated by the person who created them. So letters and emails can be authenticated by the person who drafted them. But what about bank records, medical records, and police reports? They have to be authenticated by the “custodian” of records for the institution who created the documents. That means you either have to (1) subpoena the bank (or medical provider or whatever) asking that their custodian of records appear and testify to the authenticity of the documents, or (2) issue a subpoena duces tecum (called a trial subpoena) asking the bank to send the documents directly to the Court in a sealed envelope with a signed declaration from the custodian of records stating the documents are authentic.
Either option takes some advanced planning—subpoenas must be issued at least 20 days before trial (better if it’s 30 days). You should never expect to simply walk into Court with a box full of bank records and have them admitted into evidence, that won’t work.
Remember nothing comes in without foundation. It is the critical first step that should never be overlooked—plan ahead!
A quick sidebar: typically, you prepare an exhibit binder where you compile all the documents you want to use at trial. The Court then marks the exhibits. But exhibits are NOT evidence until the Court admits them into evidence. Don’t make the mistake of thinking your exhibits are evidence, they aren’t until the Court says they are.
Everybody has heard the word “hearsay,” but what does it mean? Hearsay is any (and I mean ANY) out of Court statement asserted as true in Court. Hearsay applies not only to what people say, but to what they write as well. Therefore, all (and I mean ALL) documents are hearsay if they are used as being true because all documents are prepared outside of Court.
Generally, hearsay statements are not allowed in Court, except for the 20 or so exceptions to hearsay. Yes, there are over 20 exceptions to the hearsay rule—it’s the Swiss cheese of rules.
For example, bank records are hearsay because they were created outside of Court and we typically use them to prove the numbers listed on the statements. But they also fall into the business-records exception to hearsay. So they can come into evidence if you follow the rules for the business-records exception to hearsay.
Another exception is anything said or written by the opposing party. We call that party admission.
There’s too many exceptions to list here, but be aware that there are many exceptions to look at when preparing for trial. The best approach is to look at each witness and each document you want admitted into evidence and find the corresponding hearsay exception for each one. If you can’t find an exception, then you won’t be using that witness or document at trial.
Even if you overcome foundation and hearsay, no evidence is admitted that is not directly relevant to the issue at hand. And the Court has discretion to exclude any evidence it determines is irrelevant or unduly prejudicial. Of course, all evidence is somewhat prejudicial, that’s the whole point. But where information is being used just to put the opposing party in a bad light, without having any relevant use at trial, the Court has the choice to keep it out.
So you must be able to articulate to the Court how your particular document or witness is relevant and useful at trial. Don’t take it for granted, plan it out ahead of time. If you can’t figure out the relevance of a particular witness or document, then don’t use that evidence. Besides, going into irrelevant areas is a great way to bore the socks off the judge or jury. Better to be on the mark and keep things interesting.
That’s the basics of evidence. There’s more to it of course, but once you know foundation, hearsay and relevance you are well on your way to getting your evidence admitted at trial…OR blocking the opposing party from admitting their evidence at trial if they fail to follow the rules. You can use your knowledge of evidentiary rules as both shield and sword.
Our video series continues with Keith A. Davidson explainging what to expect from your Trust and Will litigation lawyer:
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It has recently come to my attention that not everyone is accustomed to working with lawyers as part of their daily lives. That’s a shame since we are so wonderful to be around. Us lawyers are used to working with and around other lawyers, so we sometimes forget that not everyone is accustomed to our ways. But if you haven’t worked with a lawyer before, what should you expect when you hire a lawyer to handle a Trust or Will dispute for you? Here’s some idea of what your experience should look like:
First, you need to have a meaningful consultation with the lawyer to evaluate your case. By meaningful, I mean giving the important facts to the lawyer so he or she can properly evaluate your case. Don’t give too many facts, but don’t give too few either. You may think that every fact of your case is important—it isn’t. Well not to the legal analysis anyway. That’s not to say what you are thinking and feeling are not important—they are. But a legal analysis is a different animal that looks only to certain facts…not ALL the facts.
Once you have the facts out, the lawyer should discuss your potential claims and the likelihood of success (the good), any downsides, potential defenses or counter suits that the other party may file against you (the bad), and the costs of moving forward into litigation (the ugly).
Once you approve moving forward, then the necessary petition hould be prepared (usually takes about a week or two—not a month or two), filed with the Court and you will get your first hearing date. Nothing happens at the first hearing date, it’s just a status conference for the court to determine who is objecting.
Your lawyer should then start drafting and serving written discovery requests, seeking whatever evidence you require to prove-up your petition. We like to have a discovery plan written out so we know what discovery needs to be conducted. Sometimes we only need to serve some simple requests to the opposing party, sometimes we need subpoena's, sometimes it's both. Plus there are usually depositions to take. All this discovery can easily take 3 to 6 months, or more, to complete. And then the opposing party will likely serve you with discovery, which should be responded to timely by your lawyer.
Next comes the expert witnesses. In most Trust and Will disputes there is an argument as to the capacity of the decedent. An expert witness is required to testify in Court on the decedent’s capacity.
At some point, a trial date is requested from the Court. If you file your Trust contest in Los Angeles County, then the timeframe to get a trial date will be much longer than one filed in Riverside or San Bernardino Counties. All of our California courts are backed logged due to the budget crisis, but Los Angeles County is one of the most impacted.
Usually the Court inquires, and sometimes insists, that the parties go to mediation to try to settle the case before trial. Most cases do settle before trial—that is very common. So a mediation can be scheduled at some point to try to reach a resolution.
All told, a Trust or Will dispute can take between 1 and 3 years to complete if it goes all the way to trial.
This is just a general overview, there can be any number of issues in a case that would change the general information set forth above. But hopefully this gives you some idea of the process, and what to expect from your lawyer.
Another addition to our video series: Partner Stewart R. Albertson discusses how we help protect abused Trust beneficiaries.
It may seem impossible to remove a Trustee, but not always. Case in point, Los Angeles Superior Court Judge Mitchell L. Beckloff recently removed the three co-Trustees of Herbalife founder Mark R. Hughes’s Trust (as reported by Emily Green in the Los Angeles Daily Journal). Mr. Hughes son Alexander, sole beneficiary of the $350 million Trust, brought numerous claims against the co-Trustees seeking their removal. But Judge Beckloff based their removal on just one of the claims, relating to the sale of real property.
Apparently, the co-Trustees sold a parcel of real property worth $23.7 million to a “poor” buyer—an entity that paid no money down and ultimately filed for bankruptcy protection. The Court ruled that is seemed “self-evident that a ‘prudent person’ exercising ‘reasonable care, skill and caution,’ would not have approved the transaction proposed” by the buyer. (See Emily Green’s Los Angeles Daily Journal article, page 7.)
There’s a lesson to be learned here. Not all cases have property sales worth $23.7 million, but the duties and obligations of a Trustee apply regardless of the size of the estate—or at least they should. Unfortunately, there are times when Courts decide that a breach of trust is too small to care about. But the law doesn’t say that.
The duty of a Trustee stems from the basic principal that they must act as a reasonable prudent person would, using reasonable care, skill, and caution. In other words, nothing risky. Trust funds are not supposed to be managed like a business. Business assets can, and should be, put at risk in order to earn a profit. Trust funds, by comparison, are meant to be cared for, protected, and preserved for the beneficiaries. Selling $23.7 million worth of real property for no money down to a buyer who can’t afford it is not the example of protecting and preserving assets the law is looking for.
So why don’t more Trustees adhere to their duties and use reasonable care, skill, and caution? Hard to say. In my experience, it’s largely a matter of ignorance—a Trustee not knowing his or her duties and obligations. You can’t adhere to rules you don’t know about. Of course, ignorance is no excuse, but it explains the conduct of Trustee who go astray.
But never forget, that Trustees are not held liable for every possible mistake. The rules require them to be reasonable, but not perfect.
The following is an informative guest post from our own Byron Husted about the pitfalls of meeting and confering with opposing counsel prior to bringing a motion to compel on discovery. Hope you enjoy!
For those of you who recognize the title of this blog you will understand that in the discovery process there is no “chance card” that lets you skip directly to filing a motion to compel discovery, and seek sanctions. Despite a party's threat that they will seek sanctions, no court is going to award sanctions if you don't “meet and confer in good faith” and in fact will sanction you if you don't. See C.C.P. §2033.290.
First, what is the purpose of discovery? Discovery has many purposes, but one of the main purposes is for the parties to narrow the issues. Through proper discovery, both sides narrow down what facts and evidence are truly at issue, and what facts and evidence are not. By doing this, both sides reach the merits of the case.
The catch is that many attorneys think they have to make discovery as difficult as possible; they object to many, if not all, of the discovery requests served on their client. When a party is left to deal with a litany of objections, or even a complete lack of response, from an opposing party, the courts will not give you a “chance card” to advance directly to a motion to compel. Instead, you must first try to work it out with the opposing attorney—called the “meet and confer” process.
I always imagine a marriage counselor in this situation telling the parties that they have to actually discuss and communicate the issues if they want proper resolution.
Code of Civil Procedure section 2030 requires a good faith attempt to resolve discovery disputes informally.
Code of Civil Procedure section 2030, subdivision (l), provides that "If the propounding party, on receipt of a response to interrogatories, deems that (1) an answer to a particular interrogatory is evasive or incomplete, (2) an exercise of the option to produce documents under paragraph (2) of subdivision (f) is unwarranted or the required specification of those documents is inadequate, or (3) an objection to an interrogatory is without merit or too general, that party may move for an order compelling a further response. This motion shall be accompanied by a declaration stating facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion."
So how does one “meet and confer in good faith”?
The leading case on “meet and confer” requirements is Obregon v. Superior Court (1998). The Court enumerated what should be evaluated in determining whether a party has met and conferred in good faith. Under Obregon, the relevant factors are:
1. The history of the case and the past conduct of counsel as it reflects upon the
bona fides of their efforts;
2. The nature and extent of the actual efforts expended
3. The size and complexity of the case
4. The effect of expense upon litigation and the case
5. The nature of the discovery requested and its importance to the case
6. Whether or not the discovery propounded would be so expensive for the other side that its intent was to force settlement other than to reach the merits of the case. Obregon at 431.
Discovery is supposed to be self executing. Many discovery motions should not be in court and they result from a failure in the process that can be avoided by counsel. The meet and confer process is the single most important element in reducing the nature and extent of discovery disputes and in controlling the expenses of discovery. It will take time and effort to do properly, but will avoid a substantial amount of time and expense in the long run. It requires good faith negotiation and often involves compromises by both sides. It should not be done in a perfunctory manner. Counsel should present their positions in the same manner they would in court---citing cases and showing how the information is relevant.
The process should be initiated by a letter. This letter should not just be a letter demanding more responses. The letter should lay out the party’s position with legal and factual arguments. It should be commenced in a timely fashion and provide for adequate time to respond, to reply and to discuss in person or by telephone.
Obregon is a helpful case for the court’s, but what about the litigants? According to Townsend v. Superior Court (1998), “a reasonable and good faith attempt at informal resolution entails something more than bickering with counsel . . . Rather, the law requires that counsel attempt to talk the matter over, compare their views, consult, and deliberate."
In closing, I’d like to point out a recent lesson that I was taught—probably one of the most important lessons regarding the meet and confer process. When drafting your “meet and confer” letters, realize that in many cases you are not going to actually convince opposing counsel that you are right. Rather, draft the letter as if you are writing directly to the judge. Lay out your arguments. State the facts that show why your requests are relevant to the case. Clarify your questions and narrow the scope. And remember, if the “meet and confer” process fails, you will be attaching all your letters to your motion to compel for the judge’s review.
By executing the “meet and confer” process properly, you will hopefully land on “Park Place” you’re your motion to compel and not a “Baltic Avenue”.
The tangled web of litigation can cause some pretty funny alliances at times. Emily Green of the Daily Journal reported on February 28, 2013 that the estate of Mark R. Hughes, founder of Hebalife, Ltd., who died in 2000, is still being litigated in the appellate court. The latest turn of events comes from a claim for $3 million in attorneys’ fees made by the law firm of Mitchell Silberberg & Knupp LLP and attorney Hillel Chodos (Mitchell Silberberg & Knupp LLP and Hillel Chodos vs. Suzan Hughes, et. al., A130802).
The $3 million fee is for services provided to the guardian (Suzan Hughes) of Mr. Hughes’ minor son, Alex. At the time of the litigation, Alex was a minor and Suzan Hughes was fighting to remove the Trustees of Mr. Hughes’ Trust, which had an estimated value of $300 million. The Guardian’s attorneys (Mr. Chodos and company) were allegedly paid $3 million for their services, but they had outstanding fees due of another $3 million. Apparently, the lawsuit to remove the Trustees was unsuccessful.
Once the $3 million bill was asserted, both the guardian (Suzan Hughes) and the Trustees objected to payment of the fees—bringing these former enemies into alliance. At the trial court level, the $3 million fee was denied because the Judge reasoned that the litigation was unsuccessful and was carried out primarily for the personal gratification of the guardian and NOT for the benefit of the minor. Mr. Chodos and company disagreed, saying that during their representation they were following the instructions of the guardian and fighting a lawsuit that they honestly believed was in the best interests of the minor.
The First District Court of Appeal in San Francisco heard arguments and is expected to rule later this year.
Just goes to show that fee issues are a universal truth, the only difference being the amounts. Most people don’t have to argue over $3 million in fees because not everyone has a Trust worth $300 million. While the amounts may be large, the underlying arguments are no different. Fiduciaries of all types, be they Trustees, guardians, executors, or agents under a power of attorney, owe a duty to act reasonably and only take action that is in the best interest of their beneficiaries and wards. Violate that universal truth, and fees may be denied—not just attorney’s fees, but Trustees’ fees too (and executor fees, guardian fees, agent fees, etc).
Notice I said “may” be denied. Why not “must” be denied? Because so much is left to the discretion of the trial court. If you can convince a Judge that your actions were reasonable, even if unsuccessful, then you have a chance of getting those fees approved. Not so black and white after all.
